When debt collection companies make threats, violate key legal boundaries or engage in deceptive business practices, the debtors they target with those aggressive and illegal collection practices can potentially take legal action. Federal laws, including the Fair Debt Collection Practices Act (FDCPA), limit the conduct of those engaging in debt collection for businesses.
When a company’s internal collections department or a third-party debt collector violates federal regulations and engages in abusive conduct, the debtor enduring inappropriate collection efforts may have grounds to file a lawsuit. They can request a cessation of inappropriate collection activity and damages, including any actual damages and $1,000 in statutory damages.
What collection practices does the law prohibit?
Under the FDCPA, numerous forms of collection activity are technically illegal. The practices explicitly prohibited by the FDCPA include:
- Using vulgar or profane language
- Threatening violence
- Intentionally calling multiple repeatedly to cause annoyance or disruptions
- Misrepresenting the amount owed
- Posing as a government official or attorney
- Threatening arrest over an unpaid debt
- Disclosing debt information to individuals other than the debtor, their attorney or their spouse
- Depositing post-dated checks before the date on the check
- Collecting interest or fees not authorized by the law or loan paperwork
- Calling after a debtor sends a written stop contact request
- Calling before 8:00 a.m. or after 9:00 p.m.
Creditors generally need to respect communication boundaries imposed by debtors, provided that debtors send notice in writing. If they inform a company that they cannot accept personal calls at work, calls to their place of employment should cease.
Similarly, if a professional works a second or third-shift job, they can ask creditors to stop calling them at times when they typically sleep. In cases where collection agents engage in abusive language or make threats, that conduct can also warrant a lawsuit against the collection agency or creditor.
Debtors can seek damages for reputation damage caused by inappropriate disclosures, job loss and other verifiable consequences sustained due to the improper collection activity.
Keeping records of inappropriate communications with details, including the time, date and name of the party involved, can help individual debtors hold collection agencies and creditors accountable for abusive and illegal practices. Reviewing documentation related to inappropriate debt collection with a legal professional can help people stand up for themselves.